Unethical act inside company - opened a firm in my friend's name and started buying products

Hello, all. I need help and supportive guidance on my issue as below.

I was hired by Company A, which also has a sister concern, Company B. Due to no work in Company A, I started working for Company B. There was no official communication done to take care of business development in Company B.

In Company B, we used to import products from Europe and sell them in the Indian market through distributors. However, I made a mistake here. I opened a firm in my friend's name and started buying products imported by Company B for my friend's firm and then sold them to customers. The mobile number for my friend's company also belongs to me, and there were financial transactions between my friend's firm and my bank account.

Now, I have been caught and terminated. The company has issued me a letter stating that they will recover the money that I may have earned through my friend's firm and will take legal action if I do not pay. My Full and Final settlement is also not done, and due to this, my name is spoiled in the market, and there are no job opportunities available. I am on the streets now with high EMIs to be paid and no backup support.

Where do I stand legally, and how do I proceed?

Dear SumanKQT,

Your case is complicated. A post on a forum like this is not sufficient to know the complete facts of the case. Therefore, you may seek a lawyer's opinion on how to wriggle out of the predicament you are in.

Thanks,

Dinesh Divekar

Hi,

I think you can easily defend the case with the help of a professional labor advocate.

You were hired for Company A but worked for Company B without any transfer order or official communication in place. Now, a Termination Order was issued by which Company - either A or B? While you were very clever to open a firm in your friend's name, you should have applied your prudence before giving your own mobile number to your friend's firm. Even this can be managed using some loopholes, but financial transactions between your friend's firm and your bank account will be a setback for you.

As Company B's primary business is to sell imported items through distributors, you did business transactions through your friend's firm, and hence the question of loss to Company B does not arise here. They sold the items to your friend's firm after adjusting the profit margin only. Is there a clause in Company A's appointment order that employees should not carry out any private business or something related like that?

For sure, you can fight back, but the legal process might consume much time. While Company A or B can spend time on the legal process, as an individual with EMI commitments, you will not be able to spend more time and money on this. Hence, discuss with an advocate on this; they might show you some path.